Join the Evolution

Like species, companies, industries and trade associations must evolve or die. At its Mid-Year Meeting, the Consumer Specialty Products Association provides details on how it is changing to meet its members’ needs.

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Darwinism is alive and well in the global marketplace. Companies and industries must evolve to meet and even anticipate consumers’ needs or they will fail. “The Evolving Marketplace,” was the theme of the Consumer Specialty Products Association’s (CSPA) Mid-Year Meeting in Chicago last month that attracted nearly 500 industry executives.

“Change is inevitable,” CSPA chairman Bob Scharf, Sergeant’s Pet Care Products, told attendees. “It is the rapid speed that is a challenge to us all.”

Changes at a variety of levels, including consumers, regulators and non-government organizations, are all impacting the way CSPA members must conduct their business. He noted that the internet has made the consumer better educated than ever about the products she buys, but industry must get its own message out to potential customers.

“We have to seize the opportunity to educate consumers via CSPA programs such as ACE (the Alliance for Consumer Education) and CAPCO (Consumer Aerosol Products Council),” explained Scharf. “Now, more than ever, they want to know what is in our products. We must be flexible and transparent.”

CSPA, he noted, has made strides in both areas by publishing the Ingredient Dictionary and working closely with the people who regulate the industry’s products to influence change.

Next year, CSPA will celebrate its 100th anniversary, with festivities kicking off during the Annual Meeting, Dec. 8-12, 2013. At its start, the association was known as the Insecticide Manufacturers Association, and has grown to encompass seven product categories with 240 member companies, noted CSPA president Chris Cathcart, who was quick to point out that the association and the industry it serves is progressive.

“The great idea of the last quarter, may not work anymore,” he reminded the audience.

Humane Society Honors CSPA
One new idea that has far-reaching implications for human and animal health came about when CSPA, industry and the Humane Society of the United States worked together to get a bittering agent formulated in anti-freeze in order to reduce accidental poisonings of children, pets and wildlife. Sara Amundson of the Humane Society’s Legislative Fund recognized the efforts of the Association and two of its staff members, Phil Klein and Sean Moore, with the HSUS’ Henry Spira Humane Corporate Progress Award during the meeting.

“Opposing stakeholders came together for effective change,” noted Amundson. “Manufacturers are protecting pets, kids and wildlife.”

Cathcart also noted the contributions of ACE and CAPCO. ACE enables CSPA and its members to directly reach consumers and tell them how to use products safely. ACE recently participated in the National Alliance Poison Week, an event covered local and national media.

CAPCO took exception to a National Geographic article that erroneously reported that aerosols contain chlorofluorocarbons, which deplete the ozone layer. In fact, the industry’s products have been CFC-free since 1978, and after hearing from CAPCO, National Geographic published a retraction.

Cathcart also singled out the efforts of Compliance Assistance Group, Inc., which provides CSPA members with free, one-stop shopping for expert consulting services. Another member service is Consumer Specialties Insurance, which provides liability insurance.

“The consumer is changing and so are we,” Cathcart concluded. “This is a remarkable industry and CSPA is the problem-solving vehicle for its members.”

Economists are perceived to be a glum lot; not so Steven Levitt, the author of “Freakonomics” and “Super Freakonomics.” His irreverent take on the mundane world of statistics was apparent during the opening session. Look beyond the numbers to figure out what they are actually trying to tell us, he urged. For example, years ago, IRS agent John Silagi noted that many parents were listing dependent children with strange first names and no Social Security numbers. Digging deeper, he realized that they were all fictitious. His efforts generated billions for the federal government, but the big question is, “why didn’t anyone else notice it?” asked Levitt.

By asking those kinds of questions for 10 hours a week, 50 weeks a year, Levitt was able to write “Freakonomics.” For example, he asked himself, “Is drunk driving really bad?” Turns out, yes, as drunk drivers are 10 times more likely to cause a fatality than a sober driver. But in his research, Levitt uncovered an activity that is seven times more dangerous than drunk driving—drunk walking! Although no one else seems interested in his findings, not Mothers Against Drunk Driving or Students Against Drunk Driving, to name two, Levitt estimates that drunk walking kills as many as 1,000 Americans each year.

These bits of data have made Levitt a star in the corporate world. Following the release of his book, CEOs began asking for his input—even though Levitt was first to admit that he didn’t know anything about business, which didn’t dissuade high-level executives in the least. And that’s when Levitt realized there is a big difference between academics and business people.

“In academia, you have to be 100% certain of your answer in order to defend your thesis. Therefore, in academia, you always start with the statement, ‘I don’t know,’” noted Levitt. “In business if you’re right 55% of the time, 100 times a day, then you’ll be okay. So in business, you fake the answer. The cost of saying ‘I don’t know’ in business is higher than the cost of lying!”

Unfortunately, by lying to themselves, business executives may be undermining themselves. Levitt recalled working with a fast food organization. After scrutinizing its sales data, he realized that there were two types of customers—those who cared about price and those who didn’t. He reasoned that by identifying the second group, restaurants could raise their prices and improve their bottom line by 3% in the process. But restaurant execs wouldn’t go for it, as it would undermine the data they collected using higher-priced consultanting firms.

How does Levitt obtain these insights?

“By walking around with my eyes wide open to the things that don’t make sense,” he explained.

Imagine how much more efficiently life would be if only consumers, business executives and government officials did the same?
Also during the session, CSPA presented Slava Butkovich with the Murray Glauberman Scholarship Award. Slava will attend Cal Tech in the fall with plans to attend medical school upon graduation. She is ranked No. 1 in her class at Blue Springs High School in Missouri, with a 4.5 GPA. She scored 2380 on her SATs (2400 is a perfect score) and is a National Merit Scholarship award winner.

Powerful Communication
The aerosol division’s theme, “communicating our message,” featured a presentation by Media Consultant Teri Goudie who explained how to respond to the media. She reminded the audience that in times of crisis, such as the sunscreen spray flammability issue in 2012, “you are the teacher. It is your job to instruct.”

She recalled how a hospital effectively dealt with the accidental deaths of three infants who were given the wrong medication at birth. The president of the hospital got the story, conveyed it to the staff and met with the parents privately.

Later, in a television interview with Diane Sawyer, the president of the hospital apologized for the tragedy, clearly explained how it happened as well as the steps that the hospital would be taking to make sure it never happened again.

“If you do the right thing, you will be able to say the right thing (to the media),” she explained.

Successful communication involves five steps, according to Goudie:

Focus on the unmet need of the ultimate audience (the consumer);

Create clarity with a top down approach; i.e., convey the most important information first;

Prepare to compare with numbers, analogies and history;

Weave a core theme that leads to growth; and

Back up your theme with examples, stories, analogies and research.

The key, said Goudie, is answering the question before the media has a chance to ask it.

“That enables you to turn a crisis into an opportunity to teach!,” she concluded.

The media is one thing, dealing with regulators is a different animal entirely. Bill Wood, president of Faultless Starch and chairman of the aerosol division, reviewed some of the key issues impacting the industry, including California’s air quality plans and volatile organic compound regulations, California’s Safer Consumer Products regulations, ingredient communication and CSPA’s Consumer Product Ingredient Dictionary. To successfully navigate these issues, the aerosol division has several working groups including an atmospheric policy committee, commercial standards committee, international harmonization committee, manufacturing and storage standards committee, membership committee and preferable products committee.

“These are all critical issues and projects,” he told the audience. “Get involved. Your help is needed.”

CSPA’s Kristin Power provided an update on the activities of the Alliance for Responsible Regulations. And while ARR had a hand in several victories in California during the past year, Power was quick to point out that the Alliance is not a lobbying group.
Summit Valve’s Kevin Verville reviewed the technology behind bag-on-valve products and how they enable the consumer to get a true, 360° application, which makes BOV ideal for insect repellent and sunscreen formulas.

One of the biggest undertakings at CSPA in recent years has been the publication and updating of the Consumer Product Ingredient Dictionary. The current dictionary includes more than 500 monographs, more than 1000 tradenames and 1,900 technical and other names.

“The dictionary has benefit as a technical reference,” explained CSPA’s Doug Fratz. “It is the only reference specific to the specific ingredients used in consumer products.”

He urged attendees to get involved by submitting new entries, promoting the free public access to the dictionary and getting involved in the nomenclature committee. By building a useful, comprehensive dictionary, industry members can help protect critical business information.

“We have a profound and important message if we do ingredient communication correctly,” insisted Fratz.

Green Chemistry
• There are many shades of green, when it comes to designing environmentally-friendly products. That was apparent after a special session on green chemistry, which took place during the CSPA Mid-Year Meeting. Alex Stone, a senior chemist with the Washington State Department of Ecology, reviewed how his group developed Alternative Assessment with $150,000 endowment from the Environmental Protection Agency.

“States want to get off the toxic treadmill,” he asserted. “The objective is to replace chemicals of concern in products or processes with inherently safer alternatives, thereby protecting and enhancing human health and the environment.”

The Alternative Assessment guidance was based on risk-reduction rather than risk assessment. And while Washington State will use Stone’s work to create voluntary guidance, it will not replace regulations in California and other states. Still, Stone posed some interesting questions.

“Ask yourself, do you need that (chemical)?” he asked the audience. “Is it necessary?”

“Consumer expectation is our sustainable innovation challenge,” she told the audience.
Therefore, in order for a green idea to go from concept to reality, it must:
Have an improved environmental quality;
Perform better (than existing products);
Conserve resources; and
Lower costs to the consumer.
“If it doesn’t work better (than traditional products), the consumer won’t buy it. If it’s more expense, the consumer won’t buy it,” she asserted.

With these guidelines in place, P&G has developed an array of green products including Tide Cold Power and Downy Single Rinse. Froelicher said P&G is committed using renewable materials wherever possible and creating products that rely on less packaging. At the same time, the company has established some lofty goals such as powering its plants with 100% renewable energy and having zero waste go to landfills.

“We’re not alone,” she added. “Lots of companies use green chemistry because it’s the right thing to do for the environment and the long-term success of our companies.”

A New Record for Aerosols
• For a third consecutive year, US aerosol product production increased, setting a new record high with more than 3.8 billion total units filled, a gain of 0.9%, according to CSPA. The division meeting closed with the annual results of the aerosol pressurized products survey.

Household products remain the largest product category (29% of all products) with a production increasing 2.8% last year;

Animal aerosol products, a small category that includes pesticides and grooming products that are used or sprayed directly on animals, showed the greatest percent gain with a 31% increase in production;

Personal care products, the second largest product category (25.3%), fell 4.7%; and

More than 95% of the units manufactured were reported directly by the companies that filled them.